Official launch of the new European solidarity financing fund for Africa, FEFISOL II!

[chapeau]SIDI announces the1st closing of the new FEFISOL II fund, dedicated to financing rural microfinance and small family farms in Africa, at 22.5 million euros, with a technical support envelope of one million euros.[/chapeau]

The FEFISOL II Fund is designed to help meet the crucial challenges of financing vulnerable populations in rural areas of Africa, with a particular focus on financing the agricultural sector.

Financing the agricultural sector is of crucial importance in terms of food security, employment and resilience in the face of climate change, and also in terms of the financial inclusion of women who, despite representing more than half of the agricultural workforce, often do not have the same access to financing as men.

Although it makes a major contribution to many African economies, and its growth directly contributes to poverty reduction, the agricultural sector is still poorly served financially, as it is often perceived as too risky or not profitable enough.

FEFISOL II is structured to provide financial and technical support for solutions designed locally to meet these challenges. The fund will continue to target agricultural entities sourcing most of their supplies from sustainable family farming. It will be managed by Inpulse, a Brussels-based management company – a subsidiary of SIDI and Crédit Coopératif.

In addition to the two founders, SIDI and Alterfin, most of the investors in FEFISOL have renewed their commitment to the new fund. In particular, Agence Française de Développement’s private sector subsidiary Proparco, the European Investment Bank and the French social banks Crédit Coopératif and Banca Etica in Italy have renewed their commitment. New investors are also joining the initiative: the Belgian investment company for developing countries BIO, the Alternative Bank of Switzerland (BAS), and the NGO SOS Faim Luxembourg. The technical support package is financed by Proparco.

These commitments will enable the Fund to pursue its social mission and be even more ambitious in terms of social and environmental performance. FEFISOL II will be implemented in over 28 African countries, and should eventually support 110 microfinance institutions or agricultural companies and cooperatives sourcing from smallholders, most of them Fair Trade or organic certified. The first disbursements will be made in July 2022.

By supporting the implementation of socially and environmentally sustainable practices, FEFISOL II directly aims to improve the living standards of vulnerable populations in rural Africa, reduce inequalities and promote sustainable agricultural development.

Read the press release here

[CP] EIB lends €5 million to FEFISOL II fund

[CP] European Investment Bank lends €5 million to FEFISOL II to finance Africa’s agricultural sector

 

Building on the success of FEFISOL, the first impact fund dedicated to the rural world in Africa, which closed in 2021, its two founders, SIDI and Alterfin, have been actively working on the creation of a new fund: FEFISOL II, created at the end of 2021.

Today, the EIB is announcing its entry into the capital of FEFISOL II for an amount of 5 million euros! This renewed commitment will enable the Fund to pursue and deepen its social mission.

FEFISOL 1 has had a considerable impact over the past decade:

– 86M euros disbursed, of which 93% in Sub-Saharan Africa ;

– 75% of average outstandings in local currency ;

– 92 customers financed in 25 countries;

– 139 technical support projects carried out for 51 customers.

FEFISOL II builds on FEFISOL I’s pioneering support for rural microfinance and the agricultural sector. The challenge posed by the lack of financing for rural areas in Africa, and for farmers in particular, remains crucial.

In Africa, less than 5% of loans disbursed by traditional financial institutions are earmarked for the agricultural sector, and less than 10% of farmers have access to credit. And this despite the fact that around 48% of the population depends on agriculture. Although it makes a major contribution to many African economies, the agricultural sector is still poorly served financially, as it is often perceived as too risky or not profitable enough.

Rural communities face multiple challenges: the remoteness of financing, but also the growing risks induced by climate change, as well as the financial inclusion of women, who represent 60% of the agricultural workforce in Africa without often being able to benefit from the same rights as men.

FEFISOL II is structured to provide financial and technical support for solutions designed locally to meet these challenges. FEFISOL II will be implemented in over 25 countries in sub-Saharan Africa, and is expected to support 130 microfinance institutions or agricultural companies and cooperatives sourcing from smallholders and certified fair trade or organic.

Other investors are joining FEFISOL II for a round of financing that will close at the end of March: the first investments will be effective from May!